Texas and Louisiana rank lowest for teacher retirement benefits

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Texas has worse options for the retirement of teachers that any state in the country except Louisiana, according to a study by a bipartisan nonprofit that studies public pension funds.

The discussion of teachers’ retirement benefits is an ongoing talking point in the Legislative Assembly, with Gov. Greg Abbott signing into law last year a measure granting a bonus 13th monthly benefit check to retired teachers. Pensioners and their advocates say the check was good, but not good enough given historically high inflation.

Retired teachers in Texas have not received a cost-of-living adjustment since 2004 for their monthly payments.

Equable’s study looked at teacher pension plans in all 50 states plus the District of Columbia. He compared the structure of each state’s plans, then ranked them according to their effectiveness with those who had been teaching for less than 10 years, those with 10 to 20 years of teaching experience, and those who spend their entire career in the classroom.

The main states were South Carolina, Tennessee and Oregon.

The Texas plan ranked particularly poorly for teachers with less than 20 years of service, and the lack of a cost-of-living adjustment drove down the value of its benefits.

Massive traditional pension funds — both state-backed and private employer-backed — have struggled to rack up returns high enough to pay the benefits they promised retirees. For public pensions nationwide, about 80% of the promised amount in benefits is backed by dollars in the funds themselves. The remaining 20% ​​is known as unfunded liabilities, and nationally it amounts to approximately $1 trillion.

The Texas Teachers’ Retirement System, the state’s largest retirement plan, is funded at a rate of about 76%, just below the national average. TRS and other funds enjoyed explosive growth last year on the strength of the stock market and other investments, but investment returns are likely to be much less sunny this year in what is shaping up to be a stormy year. in the financial markets.

The study argues that pension benefits are one of the factors future teachers seriously consider when evaluating where they want to work or whether they want to work in education.

The entire country has faced a teacher shortage over the past year, and Governor Greg Abbott earlier this year established a task force of experts, education officials school administration and teachers to examine the problem in Texas and recommend solutions.

Experts outside the task force have suggested the answers might be simple: better wages and benefits.




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